On July 1st 2019 President Trump signed into law a sweeping, bipartisan IRS reform bill called the Taxpayer First Act ( P.L. 116-25). This legislation aims to broadly redesign the IRS for the first time in over 20 years.
The law makes a host of targeted improvements to the IRS, aimed at bolstering its customer service, modernizing its information technology, helping victims of tax-related identity theft and strengthening taxpayers’ rights during the IRS enforcement process.
Among the provisions in the new law are establishing an independent appeals office, preventing low-income taxpayers from having their cases referred to the IRS’s private-debt collection program and creating a single point of contact at the IRS for identity theft victims. It also includes a provision to increase the penalty for failing to file a tax return, so that the bill does not add to the deficit.
For years, the tax agency has been dogged by reports that taxpayers have trouble getting in touch with agency representatives and getting good information once they are connected.
Under the IRS reform bill, the agency must now develop a comprehensive customer service strategy. Part of the process is updated training of IRS workers who deal directly with taxpayers. These changes will be based on the best practices that private sector companies use in their customer service dealings.
If you disagree with an IRS decision about your tax account, you can appeal it. The Taxpayer First Act establishes an independent administrative appeals function at the IRS that should prevent the cases going to the more costly judicial resolution level.
The appointed independent appeals official will be required to have experience in a broad range of federal tax law controversies and management of large service organizations. Taxpayers also now will get access to the IRS case against them.
Specifically, the IRS must provide certain individual and business taxpayers with their case files, if requested, prior to the start of any dispute resolution process. If a request for review is denied, the IRS would have to provide written notice of the reason to the taxpayer and to Congress.
The IRS has long encouraged taxpayers to use electronic methods when paying their tax bills. One of the most popular methods, both among the tax collector and taxpayers, is via credit or debit cards. There is, however, a fee for paying your taxes with plastic. It is collected by the companies that process the payments.
Under the new IRS reform bill, the IRS will be allowed to accept credit and debit payments directly. The processing fee paid by the taxpayer, however, will remain. So will the third-party processing options.
But the good news is that when the IRS enters into contracts with the credit card processors, it now must look for ways to minimize the fees the companies charge. The hope is that such negotiations will lead to lower overall credit/debit payment fees.
If you have any questions about how the IRS Reform Bill will impact you at tax time, consult with your tax accountant in Springfield Missouri at Schultz, Wood, & Rapp.